Banks in Crypto: Change the quiet OCC game

In a footnote to an organizational message, approximately five years of age, IL 1170, National Banking, Currency Observer Office (OCC), was buried, the door for national banks to participate in the encrypted currency market.

The possibility of updating the financial services system and providing a safe environment for customers in the encrypted currency was not achieved because the banking agencies under the Biden administration, with the message not never declining, mainly refused to recognize the existence and validity of this official publication, IL 1170.

Quickly forward to March 7, 2025, and the new OCC publication, An explanatory message 1183(IL 1183) has provided the clarity that the banking industry has deserved for a long time. OCC policy is clear that national banks can provide services related to cryptocurrencies as long as banks do so in a safe and sound way.

Before involving any new activity, banks must prove their organization that the activity is allowed, “permitted” in organizational speaking. Over the past four years, banks and those who have sought a bank have tried to use the previous guidance as a final reference source about whether the bank has been made some activities related to the encrypted currency. When banks tried to refer to that early organizational message, IL 1170, the organizers mainly told them, “Not enough, what do you have?”

In other words, for any reason, the banking organizers were elected to selectively recognize the official directives, and banks were informed of not relying on official publications that no longer support politically … but they have never been withdrawn.

Full disclosure: My company, Levelfield Financial, seeks to obtain a final permission to close when acquiring a bank, and providing services to customers who have an interest in the coded currency space is the cornerstone of our business model.

Although there is no lot of noise, like other participants in the coded currency area, leaders in the banking sector are also screaming for clarity over the past few years.

The banking sector has clearly identified organizers and well -understandable monitoring – unlike many high -tech companies that were not sure of the agencies, if any, are the organizers responsible for overseeing participants in the encrypted currency.

The banking system had been hacked not due to lack of clarity regarding those who were banking agencies, but rather, for any reason, it is no longer possible to rely on the official guidance.

Banks can provide encrypted currency trading services

The official publication of 2020, was simply deceptive An explanatory message 1170 (IL 1170), the National Bank’s authority to provide customer custody services for customers did not address customers, simply the clear authority of banks to provide customers with the traditional secure services stipulated in OCC, among the most basic and basic services provided by banks, and goes further.

In July 2020, OCC wrote at IL 1170, “National Services Banks may include in the encrypted currencies that are celebrated (SIC) services such as facilitating encrypted currency, customer and transactions in the field of currency exchange, settlement settlement, trade implementation, and retain registration (SIC), evaluation, tax services, or appropriate services.”

During the post, Occ that banks should apply the same accuracy of managing the risk that apply to traditional assets.

The transfer of the cryptocurrency within the perimeter of the banking system is logical: banks have the most experience in working with complex financial assets. The banks are very organized and must be strict in all their activities.

Thinking about OCC may be that banks, with a century-time playing books for stability, can bring confidence and expansion to a greater market than to be ignored by 3 trillion dollars a promise.

Although the new explanatory message for this week of OCC will be a great welcome by banks, participation in the category of cryptocurrencies will remain difficult for most institutions. Organizers in banks are not currently allowed to own the cryptocurrency for their own account. On January 3, 2023, OCC, Federal Deposit Insurance Company (FDIC), and Federal Reserve He issued a statement The declared banks are not allowed to possess public cryptocurrencies such as bitcoin. This restriction must be withdrawn if banks are allowed to participate in the category of cryptocurrencies and manage full risk.

The movement of cryptocurrencies in the banking system is an end to the wild days of wild days of cryptocurrencies abroad and the providers of the shadow services with the minimum capital and lack of supervision. Is it an extension of the prediction that the horrific losses incurred by ordinary investors through the collapse of FTX, BLOCKFI, Celsius and the list of others may not have happened if these investors have the option to process using the full bank insured in the FDIC instead of the unorganized entity?

The bullish trend is confusing. For banks, it is a huge opportunity for revenue – transportation fees, nursery fees, a footsteps in the millennial generation and Gen Z actually living. For customers, it is comfort and credibility; Why do you trust a shaken starting up or an organized entity when the most reliable entity is to be saved, which is your bank, can handle your bitcoin currency?

IL 1170 confirmation in addition to the last announcement of American strategic bitcoin reserves, It is a global indication that America and the banking system will be leaders in the category of encrypted currency.

While some announce the developments of the “water gatherings” last week for institutional adoption, there is something that justifies the exercise of caution and divided vision.

Current currency fluctuations – 20 % bitcoin fluctuations are not rare – while they are seen as a feature of some participants, will make some banks tense about providing exposure to customers. The banks are very careful, and the banking administration and administration boards will take some time to reach speed.

Organizers expect strong controls, and while this will be a challenge for some, the OCC’s hands leaves the implementation of C-SUITE, not the capital, then there is an elephant in the room: consumer risks. The facilitation of trading appears to be a spot until something unexpected occurs, and this will test the ability of banks to adapt the guarantees that date back to a century with one of the assets in the twenty -first century. Financial technology flourishes when the disturbance balances with discipline – a tight rope will not go safely.

IL 1183 was signed by currency representation Rodney E. Hood Personally, instead of delegating him to an observer deputy or to the chief advisor in OCC. This may mean that the decision to reaffirm the National Banking Authority to participate in the encrypted currency was taken at the highest levels.

In February, in statements at the American Banker Conference in Phoenix, the Acting Financial Observer Hood said, “acting” does not mean “inactive.” His signature on IL 1183 last week is to confirm that it means what he says.

The OCC, the new White House administration during the era of President Donald J. Trump is progressing at an unprecedented speed. The clarity of OCC and the administration that brings it to the crying currency late, and very welcome.

The clarity and durability of the banking regulatory system, which is the distinctive feature of the United States of America and one of the reasons that makes America has the largest capital market in the world, overwhelmed by politics. Official publications must have meaning, or must be withdrawn. The selective acknowledgment of the published directives leads to no meaning, and indicates a very wrong thing. Whether one agrees to guidance, everyone must agree that the laws of the financial observer act decisively and remove defects from the national banking system.

The importance of last week is that banks can facilitate the trading of cryptocurrencies or that the United States will accumulate Bitcoin in a strategic reserve; It is generalizing the idea of ​​the idea once. OCC has handed over the old players tool to redefine its importance, and perhaps reshaping how we met, invest and trust in a digital age. If the banks are due to the landing – which wears the speed of encryption with the stability of the banks – this can be the bridge between the main street and Blockchain.